Former Tyco Treasurer Testifies

by Glen Shapiro, LawAndTax-News.com, New York

23 October 2003

Testifying on Tuesday at the grand larceny and enterprise corruption trial of former Tyco International chief executive, Dennis Kozlowski and chief financial officer, Mark H. Swartz, the firm's former treasurer, Barbara Miller revealed that the two men had amended company documents on employee perks and benefits without informing the board of directors.

In testimony last week, former director of the conglomerate, Mark Fort revealed that Mr Kozlowski was afforded a great deal of freedom within the company, and was allowed to make acquisitions worth up to $200 million without first obtaining the board's approval.

However, conflicting with Kozlowski and Swartz's assertion that all of their actions were approved by the board of directors, Ms Miller announced that to the best of her knowledge, the board's compensation committee never agreed to allow the men to change the company's loan and relocation programs in the way that they did.

She went on to explain that the compensation committee saw the originals of documents pertaining to these areas, but not the amended copies submitted by the two former Tyco executives.

According to evidence given by Ms Miller, unauthorised changes made to the loan and relocation programs included allowing the payment of a relocated employee's rent for two years rather than one, permitting loans to buy two houses instead of one, and paying private school tuition, a perk which Mr Kozlowski made use of for the school fees of his three children.

The Associated Press, which reported on the case, also revealed that according to the former treasurer, Mr Swartz expanded the terms of an agreement which allowed Tyco employees to borrow money from the Key Employee Loan Program (KELP).

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